Forum Categories › VAT ON PROPERTY TRANSACTIONS › Buy, refurbish and sell property – How to claim VAT on conversions › Reply To: Buy, refurbish and sell property – How to claim VAT on conversions
This VAT on this sort of project can be complex and will depend on whether the property is residential or commercial and whether client proposes to let or sell (you say to let). Also there may be occasions when it is necessary to ensure the contractor treats work as reduced rate – maybe difficult after all the work don
Buy, refurbish and sell an existing residential property is generally an exempt supply on sale, so input vat can’t be reclaimed. As the sale is exempt there is no requirement (indeed no ability) to register for VAT.
Certain circumstances, some building work is subject to a lower VAT rate of 5%:
– renovating residential property that has been empty for more than two years;
– where there is a change in the number of dwellings, for example, converting a house into flats;
– converting a commercial building into residential use, for example, a barn conversion; and
– converting a single household residence into a house of multiple occupation (bed-sits).
The 5% rate applies to building services and related materials, but not to separately purchased building materials.
In my experience a property developer generally registers for VAT where they are able to do so (new build or commercial).